Domestic Regulation and the WTO: The Case of Water Services in Developing Countries

Trade liberalisation of environmental services, and water services in particular, under the current WTO General Agreement on Trade in Services (GATS), has been widely advocated as a means of increasing private sector participation in the water sector in developing countries. Recognising that effective regulation is needed to ensure that the potential gains from private sector involvement are fully realised, the paper considers the relationship between national regulatory autonomy and GATS liberalisation in water services. The empirical evidence on the impact of private sector involvement in the provision of water services in developing countries is reviewed, and a number of reasons why water privatisation has been problematic in lower‐income countries are identified, including transaction costs and regulatory weaknesses. The study concludes that developing countries with limited regulatory resources should adopt a cautious approach to services liberalisation, by sequencing market liberalisation measures to match the development of their regulatory institutional capacity.     

Market Incentives for Safe Foods: An Examination of Shareholder Losses from Meat and Poultry Recalls

Meat and poultry recalls, while voluntary, are carried out under governmental oversight. If firms have financial incentives to avoid being implicated in a recall situation, governmental involvement in recalls may cause firms to internalize social costs when making investment decisions concerning food safety controls. To examine these incentives, we analyze federally supervised meat and poultry recalls from 1982 to 1998 within an event study. Results show significant shareholder losses when publicly traded food companies are implicated in a recall involving serious food safety hazards. We find no evidence that the stock market reacts negatively when recalls involve less severe hazards.     

A Cost Indirect Evaluation of Productivity Change in UK Universities

The study provides an empirical analysis of productivity change in publicly-funded UK universities, against a background of government policy specifically designed to enhance the productive efficiency of universities in the provision of teaching and research. The nonparametric analysis employs a cost indirect approach to measuring productivity change, taking explicit account of the quality of research output and decomposing productivity change into technical change and efficiency change. The latter is also decomposed into changes in pure technical efficiency, scale efficiency and output congestion. Changes in size efficiency are also computed. On average, productivity declined by 4% over 1989–92, mainly as a result of regressive technical change. Evidence of biased technological change was found, with the frontier shifting out in favour of the teaching outputs and in relative to the research output.     

Budgeting and standard costing practices in New Zealand and the United Kingdom

The findings of a survey of budgeting and standard costing practices in New Zealand (NZ) and United Kingdom (UK) manufacturers are reported. The results suggest that some commentators' predictions of a demise in standard costing and variance analysis are overstated. It has been found that standard costing systems continue to be popular and that the majority of accountants surveyed do not envisage abandonment of standard costing and variance analysis in advanced manufacturing technology environments. Comparisons between budgeting and standard costing practices used in NZ and the UK reveal a high degree of consistency. In the case of the few differences that have been observed, it appears that there is a greater lag behind prescribed practice amongst NZ manufacturers. The main differences noted are: a greater proportion of performance reports used in NZ budget centers fail to distinguish between controllable and non-controllable costs; NZ manufacturers are more reliant on historic data when setting standard costs; when distinguishing between variable and fixed costs, there is a greater tendency in NZ to simply treat direct costs as variable and overhead costs as fixed.     

Managing absence in an NHS hospital

Absence studies often pay little attention to institutional settings. This study of a large hospital looks at factors affecting absence, and worker attitudes to time off. It reveals a highly committed workforce, but one with low morale, deeply distrustful of a management initiating rapid changes.     

When it comes to the crunch: What are the drivers of the US banking crisis?

This article considers how permissive regulatory conditions helped change the size and scope of the US mortgage market. Asset backed securitization facilitated an expansion of the US mortgage market and modified the structure of the value chain within which financial assets, risk and liquidity were managed. New sophisticated mortgage products, indulgent lending practices, loose credit assessment and flimsy documentation increased the probability of mortgage default in an economic downturn. US banks were not in a position to absorb mark-to-market losses on mortgage assets and goodwill impairment resulting from a credit crunch because they operate with narrow profit margins and a limited equity cushion in the balance sheet. This article questions the viability and sustainability of this banking business model.     

INDUCED INNOVATION IN UNITED STATES FIELD CROPS, 1939-78

During the past four decades, United States field crop production has been transformed by the mechanical and fertiliser revolutions. In this study crop-specific estimates of the technical progress parameters that represent these changes are used to test the microeconomic theory of induced innovation. Tests based on the land/labour ratio, derived from a reformulation of the Hayami and Ruttan model, entirely support the inducement hypothesis and suggest that the partial failure of previous empirical investigations resulted from specification problems.     

How the Client Effect Moderates Price Competition

Why is unregulated competition supposed to drive price down to ruinous levels in some high fixed-cost-low marginal-cost industries (e.g., railroads) but not in others (e.g., hotels)? We argue that price competition is moderated in high fixed-cost-low marginal-cost industries when the value one consumer realizes from the service is affected by the characterics of other consumers. We develop a simple model of this client effect using the example of the demand for hotels and then generalize the implications of our model to other industries.